Nike Inc., the world's largest athletic shoe and clothing maker, capped a strong year of financial results on Thursday by posting a 23 percent surge in quarterly income and easily topping Wall Street's expectations.
For its fiscal fourth quarter, Nike had net income of $305 million, or $1.13 per share, up from $246.2 million, or 92 cents a share, in the same period of 2003.
The results were a nickel per share better than the forecast of analysts surveyed by Thomson First Call.
Quarterly revenue increased to $3.5 billion from $3 billion for the same period ending May 31, 2003.
Analysts said the gains reflected a stronger U.S. economy, better design and marketing, steady expansion into overseas markets, improved inventory control, high visibility for endorsement athletes at top events ranging from the NBA Championship to Wimbledon, a favorable currency exchange rate and very little negative attention generated by labor rights issues, a problem in the past.
Beaverton, Ore.-based Nike also has settled a long dispute with its largest U.S. retailer, Foot Locker, which has helped boost sales despite some slight erosion in its market share.
For the full year, Nike had net income of $945.6 million, or $3.51 per share, compared to a $474 million, or $2.77 a share, in 2003.
Sales for fiscal 2004 nearly reached $12.3 billion, up 15 percent from $10.7 billion for 2003.
"It's a good day, today," Nike co-president Charlie Denson said on a conference call with analysts.
With a slate of marquee track and field athletes wearing the Nike swoosh ready for the Summer Olympics, an entire endorsement squad of NBA stars led by LeBron James, golf sales up despite a Tiger Woods slump, and Lance Armstrong hopeful about a record sixth Tour de France victory, there was little fault to find with Nike, analysts said.
"I definitely think the stars are aligning," said Mitch Kummetz, senior analyst for D.A. Davidson & Co. in Lake Oswego, Ore.
The sales and earnings were buttressed by impressive increases in orders for shoes and apparel, up 10 percent for the U.S. market and 9 percent in Europe. Orders for Asia grew 21 percent.
"They haven't seen futures order in the U.S. like that in a long time," Kummetz said.
During the recession, Nike saw a decline in sales for pricey basketball shoes that are the staple of its U.S. footwear market, despite the name of NBA superstar Michael Jordan.
But the recent figures show a resurgence in demand from teenage boys and young men, the top Nike customers in the U.S. market for product lines such as Air Force 1, Jordan retro shoes, and Shox, a shoe with cushioning technology Nike spent years developing.
Denson and co-president Mark Parker said the Shox line also showed increased demand from women.
Golf shoe and equipment sales jumped 20 percent despite the persistent slump of Woods, who failed to contend during the U.S. Open last week.